Wind energy loses its federal subsidies for 2014

Published 01/02 2014 01:01PM

Updated 10/03 2014 08:09AM

Green Right Now Reports

Congress’ on-and-off romance with wind energy is back off.

Tax credits for wind expired – again – with the close of 2013.

This isn’t the first time the industry has broken up with its Congress. Every year or every other year for the past decade lawmakers have acted like a reluctant fiancee, extending a hand but always holding back on a full-fledged support for the wind industry.

Lawmakers have been influenced by the many critics of wind, who say it’s not a good match for America if it needs subsidies. The industry, they argue, should blow on its own, or fade away.

Of course, these voices often have vested interests of their own, namely, the oil and coal industries, which once tolerated wind and solar power as tiny intrusions into the business, but are now facing a renewable industry that’s grown much stronger and stands to take away much more business. The wind sector alone claims to support 80,000 jobs and now generates enough electricity to power the equivalent of more than 15 million homes in the US. Wind generation has been growing by double-digits the last few years; solar power too (more on that another time).

Wind advocates say that the federal production tax credits (PTCs) that wind producers receive are critical to compete with the fossil fuel industries, which are richly subsidized. (Yes, those who argue against wind subsidies are themselves subsidized. Welcome to Washington.)

With Congress starting and stopping its support every year or so, the wind industry cannot realize its full potential, they say, because investors cannot abide the uncertainty.

Wind power could fly without federal assistance, but only if all energy producers were un-subsidized, they say.

One could argue that renewable power, which can help free the U.S. from dependence on dirty, finite fossil fuels and curb climate change, should be most entitled to subsidies.

But the reality is that such arguments barely make it to the surface as entrenched forces conspiring to keep wind power on a string.

“Enter the Koch brothers, oil billionaires who also own large coal companies,” wrote Jim Marston, president of the Environmental Defense Fund's US Climate and Energy Program in a December editorial.

“Their political arm, Americans for Prosperity, is targeting vulnerable Republican members of Congress with an estimated $75 million ad campaign urging them to let the production tax credit expire this December “once and for all.” As they see it, the support of tax credits for renewable energy is considered ‘meddling,' but the estimated $447 billion in tax dollars through subsidies and tax breaks that fossil fuel companies have received since 1918 isn't.”

It’s 2014, and we know how that battle came out. Koch Bros. knocked out wind power.

Marston noted the hypocrisy:

“The fact that renewable energy tax credits have to be debated every year or two certainly gives the impression that the industry can’t compete on its own without them. But the truth is that the fossil fuel industry has been propped up by the federal government for nearly 100 years and likely could not maintain its competitive edge without the government's support. Fossil fuel industry leaders recently admitted to this weakness when U.S. Senate Finance Committee Chairman Max Baucus put forth a proposal to end cherished tax breaks for oil and gas drillers, stating that, if adopted, this provision would "cripple" the recent shale oil boom.”

Democrats in Congress, or at least some Democrats in Congress, are calling for a renewal of tax credits for wind development. Governors in wind-producing states like Iowa and Kansas (though not Texas) also support continuing the tax credits. They maintain that federal dollars should support clean power generation, and the jobs it spins off, as the world forges a future based on renewables.

The Senate Finance Committee, chaired by Baucus, has proposed a way to corral the sprawling array of legacy energy subsidies with a proposal that would incentivize cleaner energy production, but without trying to pick one industry over another. The policy would provide subsidies to energy producers whose emissions are 25 percent less than current levels.

"We commend Chairman Baucus and the Senate Finance Committee for putting forward a sound policy option to provide domestic energy producers with stability for the years to come,” said AWEA's Rob Gramlich, senior vice president for public policy.

“The tax code has a century-long history of incentivizing American-made energy, and we must continue to ensure that we have plentiful, secure, clean, affordable energy to power our economy. Wind energy has already proven that it can deliver in these areas and it must continue to be a critical part of the U.S. energy mix. We appreciate Senator Baucus’ leadership in trying to find common ground to ensure that the U.S. is well-suited to face the energy challenges of the 21st century by promoting a diverse energy portfolio."